Using BlackRock’s BUIDL as Collateral, BounceBit Pilots New Bitcoin Trading Strategy

BounceBit Launches Innovative Bitcoin Trading Strategy Backed by BlackRock’s BUIDL Token

BounceBit, a leading crypto infrastructure provider blending centralized and decentralized finance, has successfully piloted a bitcoin derivatives trading strategy using BlackRock’s yield-bearing tokenized money market fund, BUIDL, as collateral — delivering an impressive annualized yield exceeding 24%.

The strategy, set to be rolled out soon to both institutional and retail investors, integrates two main components: a bitcoin basis trade, which involves holding a long position in the spot market while shorting bitcoin futures, and selling short BTC put options. Both trades are collateralized with BUIDL tokens, unlocking enhanced yield opportunities.

The cash-and-carry basis trade alone yields an annualized 4.7%, with put option writing contributing around 15%. Adding the 4.25% return generated by BUIDL collateral results in a total yield surpassing 24%, significantly outperforming traditional stablecoin-collateralized strategies that offer no yield.

Jack Lu, BounceBit’s founder and CEO, emphasized in an exclusive statement to CoinDesk, “Our strategy allows investors to capitalize on both Treasury Bill yields and funding rate arbitrage, bridging a key gap between traditional finance and crypto markets.”

BounceBit operates as a native BTC restaking platform secured by staking bitcoin alongside BounceBit’s own tokens. The network offers multiple yield avenues through native validator staking, an active DeFi ecosystem, and CeFi-like mechanisms powered by partners Ceffu and Mainnet Digital. Currently, the platform secures over $500 million in digital assets.

With the pilot’s success, BounceBit plans to launch this BUIDL-backed strategy under its new product line, BB Prime, targeting retail and institutional clients alike. A company spokesperson told CoinDesk, “BB Prime introduces a novel class of CeDeFi applications built on real-world assets, overcoming traditional challenges of limited utility beyond holding Treasury Bill yields.”

BUIDL, a tokenized investment fund launched in March 2024 by Securitize and BlackRock, is backed by short-term U.S. government bonds and operates across Ethereum, Aptos, and Polygon blockchains. It maintains a stable value pegged at one dollar per token and boasts a market capitalization of $2.88 billion.